U.S. Department of Housing and Urban Development District Office of the Inspector General Richard B. Russell Federal Building 75 Spring Street, SW, Room 700 Atlanta, GA 30303-3388 (404) 331-3369 November 4, 1996 Audit-Related Memorandum No. 97-AT-248-1802 MEMORANDUM FOR: John Perry, Director, Community Planning and Development, 4AD FROM: James D. McKay Acting District Inspector General for Audit, Southeast/Caribbean, 4AGA SUBJECT: Accounting System Evaluation Metro Atlanta Task Force for the Homeless Supportive Housing Program Grant No. GA06B95-1035 Atlanta, Georgia INTRODUCTION From February 14, 1996, through March 22, 1996, we performed a limited review of the financial management system of the Metr o Atlanta Task Force for the Homeless (Task Force) as it relates to the HUD-funded Supportive Housing Program Grant No. GA06B95-1035. HUD awarded the $12,451,233 grant to the Task Force on Novem ber 30, 1995. Under this grant, the Task Force will serve as both a gra ntor to 15 subrecipients and as a grantee providing direc t supportive housing assistance. As a grantee, the Task Force will receive $654,150 to provide job and housing counseling, famil y stabil ization training, and resettlement assistance. The Tas k Force will also receive $561,766 to cover costs to administer the subrecipient agreements. SCOPE OF REVIEW The purpose of our review was to provide you with reasonabl e assurance that this recipient of HUD's Supportive Housing fu nds has systems and controls in place to account for the receipt an d disb ursement of grant funds, and to accumulate and documen t statistical data to demonstrate program accomplishments and prepare required reports. As you know, our review was not an audit made in accordance with generally accepted government audit standards. We interviewed the Executive D irector and members of the financial management and program staff to obtain documentation to ascertain whether: (1) an accounting system existed to capture and properly classify project expenses, (2) the organization's staff appeare d knowledgeable of its responsibilities as a grant recipient o f Federa l funds and to its subrecipients, (3) the organization i s legally established, and appea red viable, and (4) the organization otherwise appeared reasonably prepared to carry out the objectives of its Supportive Housing Program. We looked for areas whic h indicated a need for technical assistance and guidance by you r office. OBSERVATIONS We con cluded that the Task Force has established organizational , financial management, and prog ram performance systems necessary to satisfactorily accomplish its HUD sponsored Supportive Housin g Program. The organization has had prior experience i n administering Federal grants and has an extended history of helping homele ss families. We offer the following comments for you r further discussion with and assistance to the Task Force. The Task Force did not have, as part of its financia l management system, a means of allocating costs as required by OMB Ci rcular A-110. Proper accounting for the Supportin g Housing Activities requires th at the Task Force have a method to identify direct and indirect costs and to properly alloca te those costs among the various programs and activities i t operates. Costs claimed against Federal grants in prio r periods may be affected and may need to be adjusted because of the lack of an allocation base and method. On June 13, 1996, the Task Force submitted a budget estimati ng what it will cost to provide a dministrative support to the 15 subrecipients. The budget, whi ch totals $206,224, is only for 1 year of the 3 year grant period and leaves $355,54 1 unbudgeted. The budget includes staff costs of $151,124 , equi pment costs of $11,200, operations costs of $3,900 an d audit costs of $40,000. The justification for the staff line item shows that th e project director will spend 50 percent of his time directing the Supportive Housing Program and 50 percent of his tim e directing the HUD Innovative Program for the first 6 months. After the first 6 months, the director will spend 100 percent of his time on the Supportive Housing Program. Since both of these programs are on-going, it is not clear who will direct the HUD Innovative Program. The justification also includes 75 percent of the salary of a consultant/grant monitor. This person is to monitor programs and contracts, and develo p additional resources for the subrecipients. Developin g additional resources for the subrecipients would not appear to be a Task Force function. The budget includes a $40,000 line item for audits. The Task Force states it will use its o wn auditor to perform audits of subre cipients who are not currently receiving an audi t acco rding to OMB Circular A-133. The budget justificatio n does not state if this is to be a staff auditor or a n individual practitioner the Ta sk Force hires to perform audit work for them. The justification does not state how man y audits will be performed. Because of the amount of funds involved, we believe you shou ld require the Task Force to provide a budget for the 3 years . You should review this budget to assure all programs pay the ir own way and that the positions listed are needed to administ er the program. Any funds not needed for administration should be returned to the subrecipients so they may provide additional direct service to the homeless population. The Task Force had not obtained audits of fiscal years 199 4 and 1995 activities, despite having received almost $2 milli on in Federal assistance. An audit covering the 2 year perio d was scheduled to begin in May 1996. Currently, the Task Force 1994 audit is in its final stages and the 1995 audit ha s begun. You should monitor the progress toward completion of both audits. Checks are required to be countersigned by the Executiv e Director and Co-Executive Director. However, because thes e two individuals are husband and wife, the dual signatur e con trol is ineffective. We suggest that you require th e second signature to be from an unrelated Board member. * * * * * This memorandum is for your in formation; no response is necessary. If you have any questions or need additional information, pleas e contact Nancy H. Cooper, Assistant District Inspector General for Audit at 404-331-3369. DISTRIBUTION Director, Community Planning and Development Division, 4AD Director, Interagency Council on the Homeless, DE Director, Metro Atlanta Task Force for the Homeless
Atlanta Task Force for the Homeless, Atlanta, GA
Published by the Department of Housing and Urban Development, Office of Inspector General on 1996-11-04.
Below is a raw (and likely hideous) rendition of the original report. (PDF)